Savings or Investment or Pay off Debt?

winnie_999

Hi,

I'm a regular reader of Martin's articles and am particularly interested in people's opinions of how best to go about handling a small amount of money I have monthly.

For a bit of history, I currently have no debt accruing interest - it is all (about 1k) held in 0% credit cards which I have a plan to pay off or relocate when the 0% finishes. I have a student loan of around 15k which I currently chip away at the standard rate. I also have a small loan from my parents which I'm not repaying at the moment.

Basically, I'm interested in using £50 a month to invest - somehow. I am wary that small investment amounts in shares is costly because of fees.

So, the question. Should I...

a) save? Believe in the power of compound interest
b) invest? If so, in what?
c) pay off debt?

Any feedback etc... is very welcome.

Thanks.

tradetime

I would keep a very close eye on the credit card debt, at 0% no problem, but the minute it moves off that it can become expensive very fast, so ensure you have the capacity to pay as much of that off as soon as it changes.
Investment is a log term deal (5+ years) and at your time of life unless you have more money than you know what to do with, I'd be inclined to keep what I had reasonably accessible.
I'd probably look around for the best regular savers accounts I could find.

nrsql

ISA.
Where do you bank?
See if they have an e-saver that you can move money to/from instantly on-line so you don't have to keep money in the current account.
Next a high paying e-saver (iceland maybe) for funds you don't need to get at so quickly (I would split between at least two in case one has problems).
One you have enough in these so you are happy you can cope with emergencies (plus enough to cover the 0% card) then go for the ISA.
It's up to you whether you go for stocks and shares or cash.
If stocks and shares if you are starting out I would go for a monthly payment - £50 is probably the min for a fund which is a bit of an issue as you might be able to only pick one fund.
I would go for a cash ISA first probably and leave the stocks and shares until you have a bit more free money or later in the year - that would give you a few hundred in the cash ISA and same in stocks and shares which is a nice start as you are probably young and gives you a chance to learn at low risk.

nicko33

First Direct regular saver isa - 7%

alternatively, anything paying more than 8.75% taxed could be considered
such as the A&L 12% Regular Saver (if you can put up with the strings attached)

winnie_999

Thanks for the advice, I think I'll go for savings until I've repaid as much debt as I can in 12 months, then I'll look at further options next April when I may have a bit more spare money.

I'm still interested at trying my hand with stocks and shares too rather than putting it all in an ISA.